ECON 2305 FINAL EXAM
Which of the following is correct?
Unemployment rate= number of unemployed/(number of employed plus number of unemployed)x100
Efficiency
refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society.
What is the total labor force?
28 million
Which of the following is an example of barter?
A barber gives a plumber a haircut in exchange for the plumber fixing the barbers leaky faucet
The agency responsible for regulating the U.S. Monetary system is the
Federal reserve
GDP is used as the basic measure of a society's economic well- being. A better measure of the economic well-being of individuals in society is.
GDP per person.
Which of the following is correct?
People working part time are counted as "employed" by the Bureau of Labor Statistics
One of the differences between the GDP deflator and the consumer price index is
The GDP deflator relfects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.
Which of the following events would cause a movement upward and to the right along the supply curve for mangos?
The price of mangos rises
Economists call an institution designed to oversee the banking system and regulate the quantity of money in the economy
a central bank
If macaroni and cheese is an inferior good then an increase in
a consumers income will cause the demand curve for macaroni and cheese to shift to the left
Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see
a decrease in the demand for energy drinks
M1 includes
demand deposits
Which of the following is both included in M1 and M2
demand deposits
Good X and Good Y are substitutes. If the price of good Y increases, then the
demand for good x will increase
Macroeconomists study
economy-wide phenomena
A movement downward and to the right along a demand curve is called a (an)
increase in quantity demanded
unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called
structural unemployment
If the cross-price elasticity of two goods is positive then the two goods are
substitutes
If the price elasticity of supply for a good is equal to infinity, then
supply curve is horizontal
If the number of sellers in a market increases, then the
supply in that market will increase
Which group within within the Federal Reserve System meets to discuss changes in the economy and determine monetary policy?
the Federal Open Market Committee
two alternative measure of the overall level of prices are
the GDP deflator and the consumer price index
In 1870, the richest country in the world was
the United Kingdom
Which of the following is an example of physical capital?
the computer a secretary uses
When in France you notice that prices are posted in euros, this best illustrates moneys function as a
unit of account
When colonists in Virginia used tobacco as money, their money
was commodity money
The quantity demanded of a good is the amount that buyers are
willing and able to purchase
In the economy of Talikastan in 2015, consumption was $1000 GDP was $1950 government purchases were $500 and investment was $700. What were the net exports for this town in 2015?
-$250
When the price of a good is $5 the quantity demanded is $100units per month; when the price is $7, the quantity demanded is 80 units per month. Using the midpoint method, the price elasticity of demand is about
0.67
In June 2009 the Bureau of Labor Statistics reported an adult population of 234.9 million, a labor force of 154 million and employment of 141.6 million. Based on these numbers the unemployment rate is
12.4/154
How many people are unemployed?
3 million
The consumer price index was 120 in 2012 and 126 in 2013. What was the inflation rate in 2013?
5.0 percent
What is the labor force participation rate?
93.3%
Measuring unemployment is the job of the
Bureau of Labor Statistics
The gains from specialization and trade are based on the absolute advantage
False
When an American doctor opens a practice in Canada, his production there is part of the production cost in the U.S. GDP
False
Demand deposits are not included in
M1 and M2
Which of the following is not correct?
Minimum wages are the predominant reason for unemployment in the U.S. economy
All U.S. paper dollars read "This note is legal tender for all debts, public and private." This statement represents which characteristic of U.S. currency?
U.S. paper money is fiat money
Elasticity is
a measure of how much buyers and sellers respond to changes in market conditions
Suppose that Jane enjoys diet coke so much that she consumes one can everyday. she enjoys gourmet cheese. If the price of diet coke rises, jane decreases her consumption by only a very small amount. but if the price of gourmet cheese rises, Jane decreases her consumption a lot. these examples illustrate the importance of,
a necessity versus a luxury in determining the price elasticity of demand.
The "yardstick" people used to post prices and record debts is called
a unit of account
In a simple-circular flow diagram, total income and total expenditure are
always equal because every transaction has a buyer and seller.
The opportunity cost of of obtaining more of one good is shown on the production possibilities frontier as the
amount of the other good that must be given up
Most goods and services produced at home
and most goods and services produced illegally are excluded from GDP
Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"
anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job which they have been laid off
Economic models
are simplifications of reality, and in this respect economic models are no different from other scientific models.
A shortage results when
binding price ceiling is imposed on a market
Last year max bought 6 pairs of athletic shoes when his income was $35,000. This year his income is $42,000 and he purchased 8 pairs of athletic shoes. Holding other factors constant, it follows that Max
considers athletic shoes to be normal goods
Job search
creates structural unemployment, while firms paying wages above equilibrium to improve worker health creates frictional unemployment
A leftward shift of a demand curve is called a(an)
decrease in demand
A decrease in the price of a good will
decrease quantity supplied
A table that shows the relationship between the price of a good and the quantity demanded of that good is called a
demand schedule
The consumption component of GDP includes spending on
durable goods, nondurable goods and services
Which of the following causes of unemployment is associated with wage rate above the market equilibrium level?
efficiency wages, minimum level wages and unions
When quantity demanded responds strongly to changes in price, demand is said to be
elastic
Net exports equal
exports minus imports
The law of demand states that, other things equal, when the price of a good
falls, the quantity demanded of the good rises
People who are unemployed because of job search are best classified as
frictionally unemployed
By definition imports are
goods produced abroad and sold domestically
By definition exports are
goods produced domestically and sold abroad
In the markets for factors of production in the circular flow diagram
households are sellers and firms are buyers
Microeconomics is the study of
how individual firms and households make decisions
A market demand curve shows
how much of a good all buyers are willing and able to buy at each possible price
Efficiency wages
increase productivity but increase unemployment
A decrease in the price of a good will
increase quantity demanded
Two goods are complements when a decrease in the price of one good
increases the demand for the other good
A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug that is
inelastic
If the price elasticity of supply for wheat is less than 1 then the supply of wheat is
inelastic
When demand is perfectly inelastic the price elasticity of demand
is zero and the demand curve is vertical
Which of the following is not a reason economies experience structural unemployment?
job search
Human capital is the
knowledge and skills that workers acquire through education,training and experience
A group of buyers and sellers of a particular good is called a(an)
market
You receive money as payment for babysitting your neighbors children. This best illustrates which function of money?
medium of exchange
A central banks setting (or altering) of the money supply is known as
monetary policy
Commodity money is
money with intrinsic value
The consumer price index is used to
monitor changes in the cost of living over time
Goods with many close substitutes tend to have
more elastic demands
The legal tender (decree) requirement means that people are
more likely to accept the dollar as a medium of exchange
The amount of unemployment that an economy normally experiences is called the
natural rate of unemployment
The inputs into production of goods and services that are provided by nature such as land, rivers and mineral deposits are called
natural resources
If two goods are complements, their cross price elasticty will be
negative
The GDP deflator is the ratio of
nominal GDP to real GDP multiplied 100
The labors force equals the
number of people employed plus the number of people unemployed
The labor force equals the
number of people employed plus the number of people unemployed.
Changes in the GDP delator reflect
only changes in price
Changes in real GDP reflect
only changes in the amounts being produced
Currency includes
paper bills and coins
Who in the adult population is counted as employed?
people who are temporarily absent from their job and people who work without pay in a family members business
The equipment and structures available to produce goods and services are called
physical capital
When drawing a demand curve,
price is measured along the vertical axis, and quantity demanded is measured along the horizontal axis.
Productivity is the amount of goods and services
produced for each hour of a workers time.Its linked to a nations economic policies
The one variable that stands out as the most significant explanation of large variations in living standards around the world is
productivity
The price elasticity of demand measure how much
quantity demanded responds to price in change
Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for
razors to increase
Which of the following statistics is usually regarded as the best single measure of a societies economic well-being?
real gross domestic product
"Other things equal when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied is
referred to as the law of supply
The phenomenon of scarcity stems from the fact that
resources are limited
An increase in supply is represented by a
rightward shift of a supply curve
An increase in demand is represented by a
rightward shift of the demand curve
Which of the following is included in M2 but not M1
saving deposits
Cyclical unemployment is closely associated with
short run ups and downs of the economy
Real GDP is a better gauge of economic well-being than is nominal GDP
true
Which of the following is the determinant of productivity?
Human capital, natural resources and physical capital per worker
An understanding of the best ways to produce goods and services is called
technology
For a good that is a necessity, demand is
tends to be inelastic
Which of the following is not a determinant of the price elasticity of demand for a good?
the steepness or flatness of the supply curve for the good
Which of the following is a part of your economics professors human capital?
the things she learned at some prestigious university
In computing the consumer price index, a base year is chosen. Which of the following statements about the base year is correct?
the value of the consumer price index is always 100 in the base year.
